9911796707
|
Home
Issues:
1. Whether the unexplained transaction of Rs. 17,840 in the assessee's account is taxable income. 2. Application of the decision in Kuppuswami Mudaliar v. Commissioner of Income-tax. Analysis: The judgment pertains to a case where the Commissioner of Income-tax referred a matter involving an assessee who owned a rice mill and was found to have left out certain transactions in his books related to sales of rice to a specific firm. The Income-tax Officer added 10% as profit on these transactions, suspecting undisclosed sales or suppressed milling receipts. Additionally, a deficit balance of Rs. 17,840 in the account with the firm was treated as income from undisclosed sources. The Appellate Assistant Commissioner and the Tribunal relied on the decision in Kuppuswami Mudaliar v. Commissioner of Income-tax to delete the additions made by the Income-tax Officer. The main issue was whether the unexplained transaction of Rs. 17,840 was taxable income. The court clarified that the Rs. 17,840 was not a cash credit but an unexplained transaction in the firm's books, not the assessee's. The sum was part of the total sales transactions between the assessee and the firm, which had already been taxed. Since the profit on the transactions had already been taxed and the Rs. 17,840 was not an independent cash credit, the court held that no further addition was warranted. The court emphasized that the addition of Rs. 17,840 was not possible as it was part of the sale proceeds from the firm. The court concluded that the decision in Kuppuswami Mudaliar v. Commissioner of Income-tax was not applicable in this case as the addition could not have been made at all. Therefore, the court ruled in favor of the assessee and awarded costs.
|
